Delivering a sharp rebuke to global steel giant ArcelorMittal, the Gujarat High Court on Friday called the company’s ₹3-crore compensation offer “peanuts” while questioning how it took more than a decade to comply with forest clearance conditions imposed in 2013.
The Court warned that if the company wants to retain the forest land, it will have to pay substantially higher compensation to the State. Otherwise, the land must be returned so that it can be restored as forest.
A Bench of Chief Justice Sunita Agarwal and Justice Vaibhavi D Nanavati said the prolonged delay in fulfilling conditions attached to the Centre’s in-principle forest clearance could not simply be brushed aside.
“So what we are saying is that if you are really interested in keeping this land, then you have to do something more. Otherwise return it. This is a forest land, return it. In-principle approval stands revoked after five years. The State will utilise the land and restore forests in that land,” Chief Justice Agarwal observed during the hearing.
Court: Delay of over a decade unacceptable
The Bench noted that although the company had taken certain steps, they were nowhere close to addressing the prolonged delay in meeting the conditions imposed by the Central government on June 8, 2013 for diversion of forest land in Gujarat.
“We do not say that you did nothing. But whatever you did was not enough. It was not enough to meet the situation which you were required to meet in 2013. For over ten years there are lapses on the part of the company,” the Court said.
The judges made it clear that the lapses could only be addressed through meaningful compensation.
“If you give us a reasonable figure, then we will decide it. But you are telling ₹3 crores. ₹3 crores is peanuts for you,” the Bench remarked.
State government also questioned
The Court also pulled up the State authorities for their apparent inaction in monitoring compliance for years.
“What were you doing for 10 years? Is there any responsibility of the State officers to see that the compliance is made? The Central government has put this responsibility on you that you will ensure compliance. For 10 years, you are not responding,” the Bench observed.
The proceedings arise from a long-pending public interest litigation concerning compliance with conditions attached to the Centre’s forest clearance.
The High Court noted that the matter is being monitored under directions of the Supreme Court of India, which had earlier affirmed the High Court’s May 3, 2013 judgment with limited modification.
Key condition fulfilled only in 2024
According to the State government, it sent nine communications to the company between 2014 and August 2025 seeking compliance with the clearance conditions.
The State also pointed out that the first parcel of land required under the approval was transferred only in October 2024 — more than ten years after the clearance was granted.
The Bench noted that although certain monetary payments had been made earlier, the transfer of land — described as a “very important element” of the approval — remained pending for years.
Rohatgi cites insolvency and pandemic
Senior Advocate Mukul Rohatgi, appearing for the company, argued that ArcelorMittal had already complied with several conditions and incurred substantial expenditure.
He said the company had purchased and handed over 133 hectares of land to the State government for compensatory afforestation.
“I have today given 133 hectares. I have purchased it and given it, milord. I don’t want it back,” Rohatgi submitted.
He also said that the delay could not be attributed entirely to the company, pointing out that the firm went through insolvency proceedings after 2017 and that compliance was disrupted during the COVID-19 pandemic.
Court signals company at fault
The Court, however, indicated that the delay could not simply be overlooked.
Chief Justice Agarwal noted that once the company accepted the conditions attached to the forest clearance, it was legally bound to comply with them within the stipulated timeframe.
“By accepting those conditions, you are not doing some charity. Actually illegality cannot be regularised, but then it will be regularisation of your action in occupying a forest land, had you completed all these conditions on time,” she observed.
The Bench clarified that it was not examining whether the project itself should be undone, but said accountability for the prolonged delay must be fixed.
“Our tentative opinion is that the company is at fault in not complying with the conditions of the in-principle approval in a time-bound manner, which should be a reasonable time if not exactly five years,” the Court said.
The matter will now be taken up after the company places a revised proposal before the Court regarding the compensation amount.
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